Asian Stocks Decline After T&D, Commonwealth Earnings Falter

By Patrick Rial and Junko Kikkawa

Aug. 13 (Bloomberg) -- Asian stocks dropped, sending the region's benchmark index to a two-year low, after Japan's economy contracted and companies reported weaker profit growth.

T&D Holdings Inc., Japan's largest publicly traded life insurer, dropped after profit slid and Commonwealth Bank of Australia fell after posting the slowest earnings growth in four years. BHP Billiton Ltd., the world's biggest mining company, slumped after copper retreated to a six-month low. China's stocks dropped, extending a 12 percent slump since the day the Olympic Games began on Aug. 8, as trading tumbled to a 21-month low.

``The situation is going to keep getting worse for company earnings, making stock market gains hard to come by,'' Tsuyoshi Shimizu, who helps oversee the equivalent of $26 billion at Mizuho Asset Management Co. in Tokyo, said in an interview with Bloomberg TV. ``The GDP report is being perceived negatively in the market.''

The MSCI Asia Pacific Index dropped 1.3 percent to 126.18 as of 11:20 a.m. in Tokyo, the lowest level since September 2006. Japan's Nikkei 225 Stock Average lost 2.2 percent to 13,006.07. All other benchmark indexes in the region fell apart from Vietnam, which was little changed.

U.S. stocks declined for the first time in three days yesterday, with the Standard & Poor's 500 Index dropping 1.2 percent, as JPMorgan Chase & Co. posted its steepest plunge since 2002. JPMorgan helped push global subprime losses over $500 billion with a $1.5 billion writedown on mortgage-backed securities.

To contact the reporter for this story: Patrick Rial in Tokyo at prial@bloomberg.net; Junko Kikkawa in Tokyo at jkikkawa@bloomberg.net.